ASX and Media Releases

AGL's Virtual Power Plant Goes Live

Thursday, 16 March 2017

AGL Energy Limited (AGL) today announced the ‘Go Live’ of what will be the world’s largest residential virtual power plant (VPP). Batteries installed in homes throughout Adelaide are now orchestrated to simultaneously aggregate the battery discharge via smart software in a cloud-based platform, giving critical mass to the VPP generation capabilities.

Managing Director & CEO Andy Vesey said the 5 MW peaking capacity of the VPP can help with security of supply and help customers to save on their energy bill.

“Our South Australian VPP demonstration is a practical example of the new energy future. We’re excited Australia’s largest operating residential VPP is ‘now live’ and the sixty plus batteries in homes across Adelaide are now linked by the smart software in our partner, Sunverge’s, cloud-based platform.

“This shows it can be done and done successfully. What we are currently seeing is the ability to simultaneously aggregate the battery discharge, which is a necessary step towards full orchestration capability. This also demonstrates the capability of the VPP to provide grid support services, including peak demand management and frequency control services, and we’ll share these results in our first public report in May this year.

“We believe the VPP will deliver benefits for multiple groups including for customers by reducing their energy bills, the network by lowering required capital investment to upgrade infrastructure, for AGL by providing another source of generation to deploy into the network with the balance used in our portfolio, and the environment through reduced emissions,” said Mr Vesey.

AGL estimates customers in the VPP trial will save around $500 per year on their energy bill. This is in addition to participants having received a battery which was heavily subsidised by AGL. The demonstration is also proving the value of batteries in the energy transition - offering an alternative capacity to thermal plants as they phase out, enabling high penetration of renewables in the SA grid by allowing intermittent renewable energy to be used when it’s needed, rather than when it’s produced.

The Australian Government, through the Australian Renewable Energy Agency (ARENA), is providing up to $5 million funding to support the $20 million project, as part of ARENA’s ongoing efforts to accelerate Australia's shift to renewable energy.
ARENA CEO Ivor Frischknecht said that by supporting early-movers like AGL and Sunverge, ARENA is fast-tracking the development of new Australian industries such as the growing battery storage sector.

“This world leading project shows Australia is at the forefront of renewable energy innovation and is actively pursuing solutions for a smooth transition to a renewable energy future with ARENA’s support,” Mr Frischknecht said.

“This trial will pave the way for more virtual power plants to be added to our networks, increasing energy security and reliability by enabling networks to capture, store and deliver solar direct from customers’ roofs, rather than relying solely on grid infrastructure.

So far, the SA VPP has produced more than 300 kW of battery capacity, with more than 200 kW of associated solar capacity. This means it has a peak output of more than half a megawatt. And the VPP has stored and delivered more than 10,000 kWh to date.

“A key point to remember is that while individual customers benefit, their participation can benefit their collective community, by using the stored energy in their battery rather than drawing from the grid, which supports their local network and community,” said Mr Vesey.

It is anticipated installation of all 1,000 batteries will be completed by the second half of 2018.

About the project

AGL’s Virtual Power Plant project is being rolled out in three phases over about 18 months. By next year, 1,000 batteries are expected to be deployed across metropolitan Adelaide.

Customers participating in the project can purchase a high quality 11.6 kWh energy storage system including hardware, software and install for $3,849 (Phase 2).

For customers with sufficient excess solar generation, this is expected to result in a seven year pay-back period. Consumers who don’t have solar already can purchase an appropriately-sized solar system packaged with their battery.

It’s hoped the project can demonstrate how relationships between electricity networks, retailers, consumers, and the market operator can create new sources of value and stability in a renewable energy future.

The VPP works by using a cloud-connected intelligent control system that allows the batteries to be directed in unison.

The vast majority of the time this will help consumers to self-consume their stored solar power during peak demand periods, benefiting both them and the broader community to manage peaks in electricity demand.

If the batteries are operated independently (outside of the connected system) they cannot be relied on to provide grid services. When working together at this scale, they can be used to provide grid stability services by discharging at a time that will be of greatest benefit for the customer and the community.

About AGL

AGL is one of Australia’s leading integrated energy companies. It is taking action to responsibly reduce its greenhouse gas emissions while providing secure and affordable energy to its customers. Drawing on over 175 years of experience, AGL serves its customers throughout eastern Australia with meeting their energy requirements, including gas, electricity, solar PV and related products and services. AGL has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation as well as renewable sources including hydro, wind, solar, landfill gas and biomass.

About ARENA

ARENA was established by the Australian Government to make renewable energy technologies more affordable and increase the supply of renewable energy in Australia. Through the provision of funding coupled with deep commercial and technical expertise, ARENA provides the support needed to accelerate the development of promising new solutions towards commercialisation. ARENA invests in renewable energy projects across the innovation chain and is committed to sharing knowledge and lessons learned from its portfolio of projects and information about renewable energy. ARENA always looks for at least matched funding from the projects it supports and to date has committed $1.1 billion in funding to more than 270 projects. For more information, visit www.arena.gov.au.